Although we made back some money with our Ultrashort ETF, it took a strong stomach to weather the opening. Having a 91 entry price meant a having a stop just below 81, and watching it open at 87 could have been frightening. Luckily for us, it held at 85.5 about 20 minutes into the trading session and rose throughout the day.
Trading the ETFs is similar to futures trading in that you have to anticipate what the market might do. Most of the women I speak to have an intuitive feel on the daily ebbs and flows of e-mini contracts such as the S&P 500. The only male trader I know who consistently made money trading the indexes was wally or Wallstreets_master.
Now regarding today's action, there were better % movers to take advantage of today's action such as EEV and notice the chart looks better when compared to our FXP.
I find that when things are starting to get better, I'm writing down two different trading plans for the next day's or week's action so that I always consider the counterargument and avoid the potential "deer in the headlights" that occurred earlier this month.
Because its options expiration and the fact the markets are closed on Monday, there's a probability that the Fed Chairman announces a surprise rate cut on Tue before the bell, or even intraday tomorrow. Since I'm a little fearful of having that possibility wipe out two days of gains here's my initial trading thoughts:
1) If the markets gap LOWER for the opening 15-30 minutes and if the FXP is trading around 99, I'm likely to sell the position and take the 8 point profit. Even though it could easily breach 100, I don't think the market will make it that easy. One particular reason is because the FXP has never had a positive gain for seven straight trading sessions. Tomorrow would be day six if it finishes green.
2) Ideally for me, the Dow at the open has at most a 120 point gain on somewhat suspect volume in the opening 30 minutes. This could allow me to temporarily add a few hundred shares to almost any Ultrashort ETF for a one day flip. If the Ultrashort ETFs gap lower at the open but at some point turn green and stay green for 30 minutes, then it increases the chance of holding the position over the weekend. However, its more likely I sell at least 25 shares at the close to lock in something.
Now even though I'm typing my initial thoughts now, the best trait of day and swing traders is too be flexible enough to adjust to what the tape says. Even though its a guaranteed certainty I'll sell 25 shares tomorrow, I could either have 475 shares, or 200 shares, or zero shares by the end of the day depending on the tape action. While I'm aware that the primary trend of the averages is still down, we're coming to the point depending on whatever indicator you're looking at such as Tradestation's T2108 indicator that a short term bounce is imminent. Even if it's a one day bounce, a 300 point Dow move bounce will wipe out more than two day's of gains. Playing the index ETF's means having to be ahead of a potential pivot point to avoid getting killed.
YTD -6.7%
Thursday, January 17, 2008
Wednesday, January 16, 2008
Stops blown, from 47% long to 25% short
Just after 10am this morning, all my longs were stopped out for losses.
Now we're long 500 of the FXP at 91. It's the Ultrashort China ETF.
Because we are two days from options expiration, two things could happen: a) the mother of all short squeezes happens and our worst fear is realized, selling at the bottom of the recent downtrend only to have the Dow rally 300 points or b) the Dow drops 70 points per day until the FED meeting on January 31 and slowly stops out the long holders.
Now we're long 500 of the FXP at 91. It's the Ultrashort China ETF.
Because we are two days from options expiration, two things could happen: a) the mother of all short squeezes happens and our worst fear is realized, selling at the bottom of the recent downtrend only to have the Dow rally 300 points or b) the Dow drops 70 points per day until the FED meeting on January 31 and slowly stops out the long holders.
Tuesday, January 15, 2008
One week later, right prediction, markets still suck
My prediction from last week understated the one day pop, as the averages were up almost 1.5%. But the subsequent days afterward erased the entire move and much more even with Mon's up day due to 10% moves in agricultural plays such as MOS and MON.
While the averages were down 2%, the real moves were in the emerging markets as FXP rose 15% as it moves double inverse to the actual index. Even EEV managed an 8% gain.
Earlier today, C finally cut its dividend as I had been stating for several months and INTC getting clobbered 13% afterhours.
So if I think the market continues to decline, I would go long the FXP, EEV, and SRS. If I believe the markets turnaround, I would go long, MOS, MON, KWK, and FXF.
Overseas markets are down as I type, so expect a 1.5% drop at the open. Ironically, I think its an opportunity to fade the gap and buy the gap down and then sell near the close for a one day long. Near the end of the day, I probably would go long the FXP and EEV if they are red for the day.
While the averages were down 2%, the real moves were in the emerging markets as FXP rose 15% as it moves double inverse to the actual index. Even EEV managed an 8% gain.
Earlier today, C finally cut its dividend as I had been stating for several months and INTC getting clobbered 13% afterhours.
So if I think the market continues to decline, I would go long the FXP, EEV, and SRS. If I believe the markets turnaround, I would go long, MOS, MON, KWK, and FXF.
Overseas markets are down as I type, so expect a 1.5% drop at the open. Ironically, I think its an opportunity to fade the gap and buy the gap down and then sell near the close for a one day long. Near the end of the day, I probably would go long the FXP and EEV if they are red for the day.
Wednesday, January 9, 2008
To my future nephew, some negative thoughts about women
At some point, hopefully ten to fifteen years AFTER he earns his graduate degree, a future nephew will meet a woman whom he believes is his equal in marriage. Before you start dreaming about living happily ever after, let me post a few devil's advocate warnings to ensure the woman you marry is NOT the Wicked Witch of the west. Notice I said woman. If by some mistake my nephew believes in something other than monogamy and commitment to one woman, he will be disowned.
1) The first face to face interaction with a woman you've never met, will determine if the relationship will succeed. It does NOT matter if you are interested in her. If she cannot fathom being seen together with you now, what makes you think she'll be interested in you five years from now.
2) If the woman you are dating has ANY of the following tendencies, end the relationship:
a) She will only associate with you if you take her to an exotic locale such as Mongolia, Mozambique, Papua New Guinea.
b) You are constantly sending her on vacations to the country of her choice with her expecting to visit 100 countries in her lifetime.
c) You are sending the woman's parents on vacations to locales such as Australia or New Zealand on business class tickets.
d) She wants a private yoga instructor for daily or weekly house visits.
e) She wants you to purchase expensive exercise or sporting equipment for her home such as an exercise bike.
f) She has you scheduling well known authors or public speakers for her amusement.
g) You are hiring a personal chef to cook her meals daily.
h) She expects one day a week away from you such as a weekend spa getaway with her friends.
The above eight details sound familiar because this is what Erin Burnett, the CNBC anchor and a typical 31-year old woman, from the February 2008 issue of Men's Health stated is what she wants in a man. I have two words for Erin and woman like her which I won't print for language reasons.
Back in September 2007, a 40-something Manhattan employee of J.P. Morgan forwarded this response to the New York Times for a personals ad he saw on Craigslist. I will condense his response for language but its almost something I would say.
The ad was from a 25-year old Manhattan female who was seeking marriage to a Wall Street male who had to have a minimum 500k annual income.
The 40-something male's response:
"I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament.
First, I'm not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here's how I see it.
Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here's why.
Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here's the rub, your looks will fade and my money will likely continue into perpetuity... in fact, it is very likely that my income increases but it is an absolute certainty that you won't be getting any more beautiful!
So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you're 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!
So in Wall Street terms, we would call you a trading position, not a buy and hold...hence the rub...marriage. It doesn't make good business sense to "buy you" (which is what you're asking) so I'd rather lease. In case you think I'm being cruel, I would say the following.
If my money were to go away, so would you, so when your beauty fades I need an out. It's as simple as that. So a deal that makes sense is dating, not marriage.
Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as "articulate, classy and spectacularly beautiful" as you has been unable to find your sugar daddy. I find it hard tobelieve that if you are as gorgeous as you say you are that the $500K hasn't found you, if not only for a tryout.
By the way, you could always find a way to make your own money and then we wouldn't need to have this difficult conversation. With all that said, I must say you're going about it the right way. Classic "pump and dump." I hope this is helpful, and if you want to enter into some sort of lease, let me know."
Now my future nephew, I'm not saying all women are Mephistopheles BUT ask yourself this question, if you didn't have any of the material things to offer the woman you are dating, would she stand by you.
1) The first face to face interaction with a woman you've never met, will determine if the relationship will succeed. It does NOT matter if you are interested in her. If she cannot fathom being seen together with you now, what makes you think she'll be interested in you five years from now.
2) If the woman you are dating has ANY of the following tendencies, end the relationship:
a) She will only associate with you if you take her to an exotic locale such as Mongolia, Mozambique, Papua New Guinea.
b) You are constantly sending her on vacations to the country of her choice with her expecting to visit 100 countries in her lifetime.
c) You are sending the woman's parents on vacations to locales such as Australia or New Zealand on business class tickets.
d) She wants a private yoga instructor for daily or weekly house visits.
e) She wants you to purchase expensive exercise or sporting equipment for her home such as an exercise bike.
f) She has you scheduling well known authors or public speakers for her amusement.
g) You are hiring a personal chef to cook her meals daily.
h) She expects one day a week away from you such as a weekend spa getaway with her friends.
The above eight details sound familiar because this is what Erin Burnett, the CNBC anchor and a typical 31-year old woman, from the February 2008 issue of Men's Health stated is what she wants in a man. I have two words for Erin and woman like her which I won't print for language reasons.
Back in September 2007, a 40-something Manhattan employee of J.P. Morgan forwarded this response to the New York Times for a personals ad he saw on Craigslist. I will condense his response for language but its almost something I would say.
The ad was from a 25-year old Manhattan female who was seeking marriage to a Wall Street male who had to have a minimum 500k annual income.
The 40-something male's response:
"I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament.
First, I'm not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here's how I see it.
Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here's why.
Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here's the rub, your looks will fade and my money will likely continue into perpetuity... in fact, it is very likely that my income increases but it is an absolute certainty that you won't be getting any more beautiful!
So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you're 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!
So in Wall Street terms, we would call you a trading position, not a buy and hold...hence the rub...marriage. It doesn't make good business sense to "buy you" (which is what you're asking) so I'd rather lease. In case you think I'm being cruel, I would say the following.
If my money were to go away, so would you, so when your beauty fades I need an out. It's as simple as that. So a deal that makes sense is dating, not marriage.
Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as "articulate, classy and spectacularly beautiful" as you has been unable to find your sugar daddy. I find it hard tobelieve that if you are as gorgeous as you say you are that the $500K hasn't found you, if not only for a tryout.
By the way, you could always find a way to make your own money and then we wouldn't need to have this difficult conversation. With all that said, I must say you're going about it the right way. Classic "pump and dump." I hope this is helpful, and if you want to enter into some sort of lease, let me know."
Now my future nephew, I'm not saying all women are Mephistopheles BUT ask yourself this question, if you didn't have any of the material things to offer the woman you are dating, would she stand by you.
Tuesday, January 8, 2008
Predictions for Wed 1/9/08
It is usually unwise to make predictions because most of the time, they are wrong. We're still 47% long, and we lost another 1/2% today. One of the traders remarked that if the trend keeps up, i'll be broke in 189 trading days.
Historically, the last eight times the QQQQ have dropped eight consecutive days, it has been up on the 9th day by an average of .7%. So if the historical trend is accurate, the Nasdaq Composite should close around 2457 on Wed.
CEG is possibly a utility I missed probably because Cramer likes it for his Action Alerts portfolio.
BPT is not a play until Feb, because its rising because of its pending dividend date (ex-dividend around 1/14). Normally, you purchase it around the 27th of Feb, May, Aug, and Nov because that is usually near the bottom of each quarterly drop due to the big dividend. They pay the dividend about a week after the ex-dividend date
PZE was rising because back on 12/21, rumors were floating that it will be bought out by an Argentine rival.
Here are some guessing closes for tomorrow since I have nothing good to say:
Dow 12677 +88
Nasdaq 2457 +17
S&P 500 1399 +9
Midcap 400 799 +3
Russell 2000 709 +4
Historically, the last eight times the QQQQ have dropped eight consecutive days, it has been up on the 9th day by an average of .7%. So if the historical trend is accurate, the Nasdaq Composite should close around 2457 on Wed.
CEG is possibly a utility I missed probably because Cramer likes it for his Action Alerts portfolio.
BPT is not a play until Feb, because its rising because of its pending dividend date (ex-dividend around 1/14). Normally, you purchase it around the 27th of Feb, May, Aug, and Nov because that is usually near the bottom of each quarterly drop due to the big dividend. They pay the dividend about a week after the ex-dividend date
PZE was rising because back on 12/21, rumors were floating that it will be bought out by an Argentine rival.
Here are some guessing closes for tomorrow since I have nothing good to say:
Dow 12677 +88
Nasdaq 2457 +17
S&P 500 1399 +9
Midcap 400 799 +3
Russell 2000 709 +4
Monday, January 7, 2008
Seven consecutive down days on QQQQ
Stubbornness is a bad trait for swingtraders. We turned red for the year today because we didn't sell our positions last Friday. So now we're stuck. Even if I think the energy positions can turn around at some point, how much pain will you be able to take in order to see it turnaround.
The worst thing is none of the positions have hit a 10% stop, but having one position go from a 4k gain to negative is inexcusable.
Ironically, of the few stocks that are up, one we sold a few days ago.
Healthcare - ESRX, CVD
Utilities - FE
Energy - BPT, PZE
Agriculture - MON
Probe trades are good and bad in that when you are wrong, it reduces your cash position. While most trades have been profitable, they haven't offset the losses on the now 47% long position.
We have this mindset that regardless of what happens, we want to lean on energy. However, this downtrend for the past seven days is costing dollars.
Casy was known to endure some drawdowns but I don't believe he let more than 10% go at any one point. We are nowhere near that point, but what concerns me is that I'll get down 10.1%, sell, and then watch in horror as the stocks I sell recover.
I think its going to be a tough nine more days and I feel I'll be in the position where I might do something crazy such as double down on both my energy longs. I won't go into margin but here's where emotions could be starting to interfere with judgment.
YTD -4.9% (and it only took four trading days, how pathetic).
The worst thing is none of the positions have hit a 10% stop, but having one position go from a 4k gain to negative is inexcusable.
Ironically, of the few stocks that are up, one we sold a few days ago.
Healthcare - ESRX, CVD
Utilities - FE
Energy - BPT, PZE
Agriculture - MON
Probe trades are good and bad in that when you are wrong, it reduces your cash position. While most trades have been profitable, they haven't offset the losses on the now 47% long position.
We have this mindset that regardless of what happens, we want to lean on energy. However, this downtrend for the past seven days is costing dollars.
Casy was known to endure some drawdowns but I don't believe he let more than 10% go at any one point. We are nowhere near that point, but what concerns me is that I'll get down 10.1%, sell, and then watch in horror as the stocks I sell recover.
I think its going to be a tough nine more days and I feel I'll be in the position where I might do something crazy such as double down on both my energy longs. I won't go into margin but here's where emotions could be starting to interfere with judgment.
YTD -4.9% (and it only took four trading days, how pathetic).
Wednesday, January 2, 2008
First trading day of 2008 goes against historical trends
After enjoying the Christmas holidays, we're back after a one week vacation. Recapping what occurred during my hiatus:
On the day before Xmas, markets were uncharacteristically up, but afterwards the following four days including the last day of 2007 were red. Solar stocks continued to climb higher and was the top performing sector for the year.
Markets are trading within a range at present, between 1460 and 1490 on the S&P. Only made one wacky yearend trade of 50 shares of AAPL on 12/31 and at present its looking like a dud. It's difficult to initiate new longs when the overall indexes show short term downtrends. While there are potential one month plays as January is the time for low volume stocks to show momentum, I sense making one trade moves with ETFs could be the better play.
With the Iowa caucuses and election rhetoric in the air for tomorrow, I think the best opportunities are looking at the price and percentage gappers list to see if something wants to establish itself as a front-runner at least for the current week. I don't believe the solar sector will be the best performer this year but that doesn't mean they can't generate decent gains.
We're off to an uncharacteristically red start to 2008, but the same thing happened last month, and we were able to turn that into a 1.9% gain by monthend.
On the day before Xmas, markets were uncharacteristically up, but afterwards the following four days including the last day of 2007 were red. Solar stocks continued to climb higher and was the top performing sector for the year.
Markets are trading within a range at present, between 1460 and 1490 on the S&P. Only made one wacky yearend trade of 50 shares of AAPL on 12/31 and at present its looking like a dud. It's difficult to initiate new longs when the overall indexes show short term downtrends. While there are potential one month plays as January is the time for low volume stocks to show momentum, I sense making one trade moves with ETFs could be the better play.
With the Iowa caucuses and election rhetoric in the air for tomorrow, I think the best opportunities are looking at the price and percentage gappers list to see if something wants to establish itself as a front-runner at least for the current week. I don't believe the solar sector will be the best performer this year but that doesn't mean they can't generate decent gains.
We're off to an uncharacteristically red start to 2008, but the same thing happened last month, and we were able to turn that into a 1.9% gain by monthend.
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